Skift Take

Combining NH Hotels with another company makes plenty of sense. It would give it added scale and might also help put an end to its shareholder infighting. Of course this is only the opening move in what is likely to be a time-consuming process and given NH's recent history we're sure that it will be anything but straightforward.

The turbulent recent history of Madrid-based NH Hotel Group has taken another twist after rival Spanish firm Barceló emerged as a potential buyer.

The tie-up would create a combined business of 478 properties and 89,000 rooms, according to travel research firm STR. Barceló’s offer values NH Hotels at around $3 billion.

“I can tell you that at Barceló we think that an integration operation like the one we have proposed to NH would be something very positive not only for the two companies involved, but for the Spanish hotel industry, because it would allow us to reach an appropriate size to start competing with the great hotel brands, with thousands of hotels under management,” a spokesperson for Barceló said.

NH Hotels has been beset by infighting among its shareholders in recent years. Chinese conglomerate HNA Group bought a stake in 2013, but its involvement has been resisted.

Last year the NH chief executive and several board members close to HNA were ousted on the back of the Chinese company’s bid for Carlson Hotels. This was viewed as a potential conflict of interest given Carlson’s stake in the Rezidor Hotel Group.

When the Carlson deal went through, there was talk that HNA might look to merge some of its hotel interests into a single company but this has failed to materialize. Disagreements with other NH Hotels shareholders and new capital controls in China have prompted speculation that HNA might now be looking to sell.

Even if this is the case, any deal would have to win over the board at NH Hotels — and Barcelo’s opening offer doesn’t seem to have done so.

“It is true that Barceló has made a preliminary proposal to merge both companies; a proposal that has not been requested by us and is non-binding,” a spokesperson for NH Hotels said. “In this offer, Barceló Group proposes to have 60% of the company that would result after the merger and a majority in its highest governing body. All of this once again according to Barceló’s non-requested proposal.”

The spokesperson said that the board of directors for NH Hotel Group recently approved a three-year strategic plan to grow the company and that “any changes regarding this decision or other strategic alternatives or considerations will be communicated accordingly to the market.”

Analysts at Banco BPI called the proposal “an interesting offer” although they suggested that a tie-up with Rezidor would have greater synergies.

A combined Barceló-NH Hotels wouldn’t come close to the size of industry leaders such as Marriott or Hilton, but would elevate it into the top 20 biggest global operators, according to STR.

A spokesperson for HNA Group declined to comment.

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Tags: hna, m&a, nh hotels

Photo credit: The NH Amsterdam Centre. Parent company NH Hotel Group has received a tentative takeover offer from Spanish rival Barceló. NH Hotel Group via Facebook

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